Katzenberg: Digital cinema a must before 3-D

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AMSTERDAM -- The digital rollout across Europe and beyond will have to speed up or face a difficult future, DreamWorks Animation CEO Jeffrey Katzenberg said on Day 1 of Cinema Expo.

Katzenberg, a regular attendee at the European exhibition confab, said Monday that he regards the opportunities offered by 3-D digital as "unmissable" for exhibitors. But he noted that to take advantage of 3-D digital, operators will have to adopt 2-D digital technology first and faster overseas.

"There's a chance to change the economics of (exhibition) for the first time in 17 years," Katzenberg told a packed audience during a Paramount Pictures International-hosted discussion alongside NATO boss John Fithian and Steve Knibbs, COO of U.K. exhibition outfit Vue Entertainment.

The enthusiastic DreamWorks chief, who earlier thrilled the audience by bringing Jerry Seinfeld to the stage to buzz about his "Bee Movie," said that with all the big-name filmmakers backing 3-D technology, his studio will be using it to make all its movies from 2009.

"We're taking on the additional costs, which are estimated to be $15 million a film, for us to author our films this way from 2009," he said. "These opportunities come once in a lifetime."

Katzenberg also pointed to the fact that 3-D movies are pirate-proof as handycam recordings simply don't work.

Fithian told the audience that he believes 3-D cinema "is fundamentally important to the future of all cinema owners." And Knibbs, whose Vue Entertainment is one of a handful of British circuits to bite the bullet and install digital screens, said his screens have experienced a 40%-50% uptick in grosses and occupancy levels when playing 3-D offerings.

But Katzenberg also said that there is still a long way to go, with thousands of screens needed by 2009 to accommodate what he predicts will be a turning point for the movie biz.

"The international market is further behind the U.S., but I am willing to predict that when exhibitors see 3-D authored material, they will get digital," he said.

Despite Katzenberg's enthusiasm, Day 1 here was dominated by the doom and gloom of just how shambolic and piecemeal digital-cinema adoption has been across Europe.

The U.K., which relies on government-subsidized digital screens for a circuit of little more than 250 screens, and Germany, which has seen falling admissions and slow digital screen additions, are just two examples of territories struggling to come up with a consistent approach, delegates heard.

But the announcement by Arts Alliance Media, a European provider of digital film distribution services, that it has signed 20th Century Fox and Universal Pictures International to nonexclusive, long-term Virtual Print Fee agreements is expected to create more appetite to install digital here.

Julian Levin, executive vp digital exhibition at 20th Century Fox, said earlier in the day that the studio will "be losing money" in the first few years of digital conversion. Levin said exhibitors should remember that the studio will be doing everything twice, creating both old-style prints and digital prints while the adoption process gathers pace.

Those close to the situation hinted that the distributors will pay about 70% of the costs of installation, with the remaining 30% coming from the exhibitors and potential backing from banks.

Scott Sherr, senior vp digital cinema operations at Sony Pictures Releasing, told the panelists and audience that "we're all going to have take risks to move forward" with digital but that "there is going to be unknown benefits" with it.

"(Digital rollout) has also stalled in the U.S., not just Europe," Sherr added. "It's because of the complexity of the deals, because the one price fits all VPF deal just doesn't work."

Away from the headache of digital rollout and the question of who will pay, delegates were treated to quite a show by Paramount Pictures International, the nascent overseas releasing arm for Paramount, which made its Expo bow following the dismantling of United International Pictures.

PPI president Andrew Cripps introduced Katzenberg, who came up three times: first to talk about "Bee Movie" with Seinfeld, then to deliver his digital sermon and finally to tout "Kung Foo Panda," with the project's co-director, John Stevenson. As Cripps quipped later: "I would like to thank all the speakers today, Jeffrey, Jeffrey and Jeffrey."

Seinfeld joked with the audience about Dutch people cycling in a strange upright position. "And this from a country that invented the windmill. You'd think they'd know a bit about wind," he said before getting down to the business of talking up "Bee Movie."

Paramount Vantage president Nick Meyer detailed his division's upcoming releases, and the presentation ended with some impressive interior pyrotechnics after director Matthew Vaughn and his star Charlie Cox talked through extensive footage from the fantasy adventure "Stardust."

Confabbers got to see world exclusive footage from the set of the Halle Berry-Benicio Del Toro starrer "Things We Lost in the Fire" and the Renee Zellweger supernatural horror "Case 39," while Ben Stiller sent a taped message about clogs, hash brownies and his upcoming Farrelly brothers comedy "The Heartbreak Kid." Judd Apatow's taped message, meanwhile, had delegates chuckling as he complained that he hadn't been sent to Amsterdam "because there wasn't the budget" to talk about the upcoming comedy "Drillbit Taylor."

Day 1 finished with a screening of "Transformers" from Paramount.

Cinema Expo International is produced by the Nielsen Film Group, a division of Nielsen Business Media, parent company of The Hollywood Reporter. It runs through Thursday at the Amsterdam RAI.